Forex, unrealized investment losses weigh on Sanhua’s profit
Refrigeration component maker Zhejiang Sanhua Intelligent Controls Co. Ltd. (2050.HK; 002050.SZ) reported on Wednesday that its revenue rose 5.18% year-on-year to 25.27 billion yuan ($3.791 billion) in the first nine months of this year. But its net profit fell 5.4% to 3.07 billion yuan, while its profit excluding non-recurring items increased 2.68% to 3.17 billion yuan.
In the third quarter, Sanhua’s revenue grew 7.82% to 8.37 billion yuan, while its net profit fell 9.64% to 1.02 billion yuan. Its net profit excluding non-recurring items also declined 5.09% to 1.02 billion yuan.
The company’s foreign exchange losses increased to 383 million yuan in the first nine months of the year from 68.85 million yuan a year earlier, sharply boosting its financial expenses to 287 million yuan. The company also recorded unrealized investment losses of 215 million yuan. Fair value changes in its investments resulted in an additional loss of 212 million yuan, compared with a gain of 112 million yuan a year earlier.
The company’s net operating cash inflow rose 22.58% to 3.75 billion yuan during the period, mainly driven by increased cash receipts from sales of goods and services.
Sanhua’s shares opened lower on Thursday in Hong Kong and traded at HK$22.2 by the midday break, down 4.23%. The stock has fallen 42.1% year-to-date.
By Lee Shih Ta
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